January 4, 2005 9:00 PM PST

HP unveils plans for digital home invasion

Hewlett-Packard on Tuesday sketched out its 2005 road map for digital dominance in living rooms, promising an HDTV media "hub," new variations on its Digital Entertainment Center PC and 17 new flat-panel TV models by year's end.

The company also announced partnerships with Panasonic and Royal Philips Electronics, in advance of the Consumer Electronics Show (CES) that opens in Las Vegas this week.

HP and Philips will work together to create new digital rights management (DRM) technology called the Video Content Protection System (VCPS). HP and Panasonic will develop interoperable DVD products based on DVR+R, DVD-RAM and next-generation Blu-ray technology.

HP unveiled the broad strokes of its new consumer strategy in August, when it announced a slew of digital home products, including its first television sets and an HP-branded version of Apple Computer's popular iPod music player. HP hopes the moves will help fuel its $20 billion a year consumer business, which to date has been built largely on the back of printers, PCs and digital cameras.

HP executives said the new products will come throughout the year, but gave no firm details on release dates or prices.

"Customers want simplicity, innovation and mainstream price points," said Vyomesch Joshi, executive vice president of HP's imaging and printing group, who on Tuesday promised all three without offering specifics.

Consumer electronics makers have tried for at least two years to wed TVs with PCs to scant consumer notice or excitement. A new rush of home networking products from companies like HP promises to raise consumer awareness in 2005.

Falling prices have fueled sales of wireless routers that connect devices in the home, but most buyers for now have focused on connecting PCs and laptops to the Net.

Joshi said HP's approach essentially divides the world into two types of digital consumers--those who want to keep the PC experience while accessing multimedia, and those who don't.

HP's new media hub will run the Linux operating system, offer high-definition television recording and an Ethernet connection to access media files such as photos, music and home video stored on a PC. The device will use a remote control rather than a keyboard, offering a simpler interface for consumers who don't want a full PC experience.

For PC aficionados, HP will release two new versions of its Digital Entertainment Center PC, which runs Microsoft's Windows XP Media Center Edition operating system.

HP's new televisions will include plasma and LCD models, as well as home theater projectors and its first rear-projection television. Joshi said the projectors will use Texas Instruments' digital light processor (DLP) chipset, enhanced with proprietary HP technology that is designed to offer improved image resolution at lower costs.

Protecting digital rights
In addition to unveiling new hardware, HP is beginning to lay the groundwork for strategic participation in developing DRM technology through its alliance with Philips.

Creating digital locks that pass muster with major music labels and Hollywood studios is widely considered a crucial step in the evolution of digital media to ensure artists and publishers get paid, barring more radical experiments such as compulsory licensing or hardware taxes.

At last year's CES show, HP CEO Carly Fiorina hit the bully pulpit defending the rights of artists and publishers against the encroachments of peer-to-peer networks and pirate CD and DVD factories.

Philips is a joint investor with Sony in DRM pioneer Intertrust, and the new alliance puts HP squarely--if belatedly--in the race to develop locks that many believe will ultimately control how consumers gain access to most legally purchased digital files, including movies and music.

HP's copyright protection plans could complicate its relationship with partners Apple and Microsoft, both of which are pushing their own proprietary DRM platforms. Microsoft has been pushing its Windows Media technology for years and was long considered the only game in town until Apple burst on the scene with its iTunes Music Store in April 2003.

iTunes songs come wrapped in Apple's Fairplay technology, which prevents unauthorized copying of songs. Those songs can be stored and played on several computers and burned to CDs, but can be played on only one brand of portable music player--Apple's iPod. Apple has sold more than 200 million iTunes tracks worldwide to date, making it the runaway leader in sales of copy-protected music.

Apple has granted HP a license to resell a branded version of its iPod, but has so far refused to license its Fairplay technology to third parties, despite entreaties from partners, such as HP, and rivals, such as RealNetworks.

"We want to support the success of iTunes and iPod, but over time we hope Apple starts to be more open," said Ted Simonides, director of strategy and planning for HP's consumer digital entertainment. "We're hoping to help influence them" to make that choice.

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Digital times coming already but not enough
Microsoft seems took the lead to throw out Digital Home idea. Intel, DELL quite some bigs join the line. Technology lighten the life and create opportunity and disorder in market.
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